The other day, I went in to my local Repographics store and noticed they had a 3D printer and various models on display. I asked the clerk how often the printer was used and he quickly replied, "Just about every day."
I thought to myself, "Wow!, almost every day." For a technology that is roughly two years old and is just starting to become mainstream, the quick adoption and use of 3D printers really took me by surprise. It got me thinking about the impact this technology may have on industrial production and industrial space use in the United States.
A look into the future!
It is no secret that, over the past 20 years, a large amount of low and medium skilled production jobs have been outsourced to lower wage countries around the world. This decentralized production model was made possible by technological advancements in inventory management, ordering processes and ease of information sharing. US companies enticed by increasing margins outsourced or offshored their production facilities while enhancing their supply chain models to combat the logistical headaches resulting from the decentralization. Production companies based in the US that were slow to adapt were quickly left behind and eventually shuttered as more and more orders were sent overseas. That being said, offshoring production was not a paradigm shift in production, it was a production location shift that disrupted the production business model. Offshoring was a cost cutting measure, not a production revolution.
3D printing, and eventually large scale 3D printing production, is a paradigm shift in how end-products are constructed. It has the potential to revolutionize the industrial sector in the United States.
The best way to look at this is through an example. Take your average bookshelf. On the surface, a bookshelf seems pretty easy to make. Couple pieces of wood, some paint, nails, wood glue, and additional hardware. Not much going on here. But look closer. Is every piece of wood on the bookshelf the same type? Is the top of the bookshelf the same material as the back of the bookshelf? I know my IKEA bookshelf does not use the same material everywhere. And the the nails ... are all of them the same? Are they all big, small, long, short? Is the paint the same? Is that even paint?
Every piece of material prior to final assembly is produced en mass in some other location with the end product in mind. This step-by-step production process has been the basic model of industrial production for over 100 years. It requires numerous supply facilities producing a variety of differentiated goods for retailers. Retailers then order large quantities of materials from these suppliers based on anticipated order quantities. During production, left over or excess materials go to waste resulting in a loss to the company. 3D production will change all of this.
The new production model 3D printing enables is being called Distributed Printing. The basic premise is, when an order is placed, the order is printed at a localized printing facility and the end product is shipped directly to the consumer. No excess material is ordered by retailers because materials are only expended when an order is fulfilled. Numerous suppliers of differentiated products will no longer be required because the printer can make whatever it needs. The benefit of cheap labor is minimized because actual fabrication is now completed almost entirely by a robot versus various manual production steps. Shipping of materials is minimized as the printer removes numerous production steps between suppliers and retailers. Distributed Printing is nothing short of a game changer.
What then does this mean to the US industrial market? I believe it means a couple things:
- A large number of offshored production facilities will be eliminated completely and will not be replaced in the US or abroad. Various mid-step production components will be completely eliminated because 3D printing will make them obsolete.
- A large number of new production facilities will be built in local markets throughout the US and will be used as distribution and production facilities. These facilities will be large with a broad array of production style 3D printers that are capable of making various products quickly and efficiently for a diverse set of retailers.
- Hand made or "old school" type manufacturing facilities will become more and more niche industries catering to a smaller but more loyal consumer base. Demand for outdated industrial space therefore decreases.
- Industrial production will now be focused on improving production speeds and minimizing production waste for new products. New industries and consultants focused on helping companies improve these areas will be in high demand.
These four things will wreak short term havoc on industrial companies throughout the world. Certain jobs and countless amounts of industrial space will become obsolete while new jobs and new industrial space will be built. The question is, who will be recognize these future trends in advance and be the ones to capitalize on the opportunities they provide?